Asked by Eliani Acosta on Jun 29, 2024
Verified
Related to the Economics in Practice on page 238: Returns in the stock market are ________ than the returns on government bonds.
A) much more volatile
B) always worth more
C) much more stable
D) always worth less
Stock Market
A marketplace where securities such as stocks and bonds are bought and sold, providing companies with access to capital and investors with a slice of ownership in companies and potential income.
Government Bonds
Debt securities issued by a government to support government spending and obligations, typically offering a fixed rate of return over a certain period.
Volatile
Referring to a substance that changes state or quality easily, or, in financial contexts, to markets or prices that change rapidly and unpredictably.
- Explain how investments in stocks can lead to capital gains or losses and the factors that might influence these outcomes.
Verified Answer
GC
Gabriel CorzineJul 02, 2024
Final Answer :
A
Explanation :
Stock market returns are much more volatile than the returns on government bonds because the stock market is subject to a wide range of economic, financial, and global factors that can cause rapid changes in stock prices, whereas government bonds are generally considered safer investments with more predictable returns.
Learning Objectives
- Explain how investments in stocks can lead to capital gains or losses and the factors that might influence these outcomes.